A blog on eminent domain, land-use, and related matters.

Bubble, Bubble — Toil and Trouble

Being a rational sort, we have entertained the hope that the 2008 collapse of the California housing bubble may have taught us Californians a lesson. But maybe not. The latest dispatches from the California housing front indicate that home prices are moving up again and in areas where people want to live — not some selected posh enclaves — are once again moving into the area of unaffordability for most people.

Thus, the median home price in California has just hit $319,600, up 7.5% from last month. And remember, to state the obvious, median means that half the houses in the state fetch prices that are higher than that.

Desirable cities in the state, go like this. San Francisco – $517,7000, up 12.1% from last month, San Jose – $618,000 – up 13.4%. In Los Angeles, which is a huge metropolis that includes some posh places, but also has a large working class population, the median price is $408,900, up 6.%.

Take note, however, that should you be able to find a home in our neck of the woods (the East San Fernando Valley) it is a certainty that it would be a lot more expensive than that — and Burbank, where we live, ain’t no Beverly Hills. But even here, should you find a house for sale for a mere 400K, chances are you wouldn’t want to live in it. At the same time, in depressed areas of the state, like Riverside county, for example, the median house goes for just under $200,000.

A note of caution: these figures may be distorted by the fact that recently an unusually high number of people have been buying homes for cash — free and clear — so it seems reasonable to suppose that they want to put their money into housing to avoid the likely coming inflation surge. But there can’t be that many people with a few hundred-thousand dollar bills under their matresses, so that does not look like an enduring trend. But then again, this is California, man. Who knows what will happen?